Universal Music says not in talks on EMI

LONDON (Reuters) - The world's largest music company Universal Music Group, owned by Vivendi, is not holding talks with Terra Firma about a deal for struggling firm EMI , a spokesman said on Tuesday.

Speculation has swirled in recent weeks that private equity owners Terra Firma could look to sell certain EMI assets or break the group up, as it faces failing a test of its banking covenants this month.

"We are not in talks with Terra Firma," the spokesman said.

Sources familiar with the situation have told Reuters that Warner Music Group, the world's third largest music company, is talking with the private equity-backed music joint venture KKR/Bertelsmann about making a joint bid for EMI, the world's fourth largest music group.

Bertelsmann Finance Officer Thomas Rabe said earlier on Tuesday the BMG Rights groups would look at EMI if it was up for sale but said there were no formal talks at the moment.

(Reporting by Kate Holton; editing by Georgina Prodhan)